Mixed messages on development aid in papal encyclical

23 Jul 2009

Pope Benedict calls for more aid in Caritas in veritate - but with reservations

In his recent encyclical, Pope Benedict mentioned aid on 19 occasions. Development agencies have been quick to pounce on his call for more aid. However, 15 of the mentions of the word 'aid' were implicit or explicit criticisms of how aid was delivered or used.

Philip Booth writes in the Catholic Times...

It is not surprising that much of the recent encyclical Caritas in veritate discusses the plight of the worlds poorest peoples. Before being delayed, it was intended that the document would be published around the 40th anniversary of Populorum progressio, Pope Paul VIs encyclical on development. In Benedicts encyclical the word aid is mentioned 19 times and the word development 255 times. The underlying message is that matters of development and justice cannot be separated from moral truths relating to the nature of the human person.

There is much in this rich document, but here I wish to focus on some of the practicalities related to development aid. These practicalities, it should be added, are definitely not the most important part of the document  though they are not unimportant.

The Holy Father makes a very definitive statement about aid that, no doubt, will be welcomed by development agencies and charities. The Pope says: economically developed nations should do all they can to allocate larger portions of their gross domestic product to development aid.

Personally, I have reservations about this  and we are entitled to debate technical economic and political recommendations within the Churchs social teaching. The record of foreign aid is not good. About 40% of all arms in Africa are financed by diverted foreign aid. Often aid does not reach its intended beneficiaries. For example, a 2004 survey tracked spending by the government of Chad intended for rural hospital projects: only 1% of the intended budget reached the hospitals. Detailed economic studies find little evidence that aid leads to growth, and studies in political economy find convincing reasons why aid can distort economies and entrench the position of the rich, powerful and corrupt.

The Holy Father has not ignored these issues: far from it. He believes these problems can be overcome. Whilst this might be debatable, he has certainly laid out the best path possible if there is to be hope that aid will be used more effectively.

Early in the encyclical, we are told: International aid has often been diverted from its proper ends, through irresponsible actions. We are reminded of the grave irresponsibility of the governments of former colonies. Presciently, the Pope also tells us how we can avoid these problems. For example, he says: Aid programmes must increasingly acquire the characteristics of participation and completion from the grass roots. In other words, we do not discharge our responsibilities simply when we provide aid (whether through charity or government transfers). Those responsible have a duty  a very serious duty given the historical record  to ensure that aid is provided in a bottom-up way which genuinely leads to development for the poor. For example, the cited problems with the Chad hospital projects might have been avoided if spending had supported micro-finance programmes for health provision within the community instead of being distributed by the Chad government. Likewise, in pursuing the millennium development goals with regard to education, we should perhaps fund poor families and their communities so that they can obtain education for their children in a way that is appropriate to their own social and economic circumstances. This may work better than funding government school-building programmes by which the approach of the West to schooling is often foisted on communities whose situations are quite different.

The Pope also makes explicit the importance of institution building for development. Certain important roles for the state were laid out by Pope John Paul II in the encyclical Centesimus annus. Benedicts encyclical reflects this and seems to take on board the lessons of what is often called institutional economics. It suggests that a main focus of development aid should be to ensure that institutions exist to ensure the rule of law, protection of property rights, a properly-functioning democracy, proper systems for maintaining public order, and so on. As if to anticipate the accusation that promoting such institution building amounts to cultural imperialism the Pope points out that this basic framework, within which the economy and civil society develop, will reflect the specific culture within which it is embedded.

In a section which will gain applause from both the left and from believers in the market economy, the Pope criticises tied aid and demands a removal of developed-country trade barriers which stop under-developed countries from selling their goods and produce. Indeed, Benedict goes as far as suggesting that encouraging trade is the principal form of assistance to be provided to under-developed countries. He also expresses concern about aid-dependency.

These lessons are important. If aid can be spent in a radically better way, so that it genuinely leads to economic development, the potential gains are huge. A World Bank economist estimated that, if Zambia had converted all the aid it received between 1960 and 1990 into investments which yielded a reasonable return, its GDP per head would have been $20,000 per head  the reality was a GDP per head of $500: lower than its 1960 level.

The Pope also has advice for those involved in distributing aid  including agencies and charities. As he puts it: international organizations might question the actual effectiveness of their bureaucratic and administrative machinery, which is often excessively costly. He calls for complete financial transparency by all aid organisations. He blames both providers of aid and recipients for diverting money from the purposes for which it was intended. He expresses concern that aid can lead to dependence and also, if badly administered, can give rise to exploitation and oppression. This can happen where aid budgets are large in relation to developing countries domestic budgets and the money gets into the hands of the rich and powerful rather than the poor and needy.

Perhaps the most fascinating proposal, coming almost from left field, was the specific way in which the Holy Father suggested that aid could be financed. He suggested, firstly, that western welfare states could be reviewed. They could be simultaneously made cheaper and more effective by moving away from the model of centralised state provision, thus releasing money for foreign aid. Secondly, the Pope suggested a device described as fiscal subsidiarity whereby taxpayers decide how a proportion of taxes is allocated. This idea should not be dismissed, but a better way of achieving a similar result might be to allow citizens to have a reduction in their tax bill up to a certain sum if that sum is given to charities working in specific fields  a sort of enhanced gift aid scheme. That would be a more genuine expression of subsidiarity because the money would be in the hands of charities and the organisations of civil society that are praised so much in Caritas in veritate.

Whilst these discussions are very important, the main message of the encyclical is not economic or political. The key theme, reiterated throughout the document, is that development requires the correct moral orientation  charity cannot be separated from the pursuit of truth. For example, the Pope says: Some non-governmental Organizations work actively to spread abortion Moreover, there is reason to suspect that development aid is sometimes linked to specific health-care policies which de facto involve the imposition of strong birth control measures. He comments that openness to life is at the centre of true development.

This may be difficult territory for some. Amongst other things, we are being asked never to close our minds to life issues when working in the field of development. Many political campaigners in this area of development aid, and also campaigners on environmental matters, are not our natural allies  they do not share the Churchs view of how human dignity needs to be reflected in economic development. In this respect, as in many others, this encyclical is a challenge to all who act with the Churchs blessing in this field.